Offshoring

This article is about the business process involving a single company. For offshore outsourcing, see Outsourcing. For other uses, see Offshore (disambiguation).

Offshoring is the relocation of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. Usually this refers to a company business, although state governments may also employ offshoring.[1] More recently, technical and administrative services have been offshored.

Offshoring neither implies nor precludes involving a different company to be responsible for a business process. Therefore, offshoring should not be confused with outsourcing which does imply one company relying on another. In practice, the concepts can be intertwined, i.e offshore outsourcing, and can be individually or jointly, partially or completely reversed, as described by terms such as reshoring, inshoring, and insourcing.

In-house offshoring is when the offshored work is done by means of an internal (captive) delivery model.[2] [3]

Imported services from subsidiaries or other closely related suppliers are included, whereas intermediate goods, such as partially completed cars or computers, may not be.[4]

  1. ^ Zuckerman, Michael A. (November 2008). "The Offshoring of American Government". SSRN 1143044.
  2. ^ Stephan Manning; Silvia Massini; Arie Lewin (October 20, 2008). "SSRN-A Dynamic Perspective on Next-Generation Offshoring: The Global Sourcing of Science and Engineering Talent". Academy of Management Perspectives. 22 (3): 35–54. doi:10.5465/amp.2008.34587994. S2CID 8998524. SSRN 1287369.
  3. ^ Cliff Justice; Stan Lepeak. "Captive Audience: How to Partner with Service Providers to Improve In-House Offshore Operations". CIO magazine. a.k.a. internal shared-services centers in low-cost locations
  4. ^ See "Appendix II: Definitions of Offshoring" in General Accounting Office: "International Trade: Current Government Data Provide Limited Insight into Offshoring of Services", September 2004. Imported intermediate goods are included in offshoring in "Swenson, D: "International Outsourcing", in The New Palgrave Dictionary of Economics, 2008.